Thursday, December 1, 2011
This week in MarketWatch: changes in banking, changes in health care, and changes in China.
According to Bank of England economists, the gigantic balance sheet expansion of global banks in the decade prior to the credit crisis was wrongly accounted for as increased value added. “High pre-crisis returns to banking simply reflected increased risk-taking across the sector. If risk-making were a value-adding activity, Russian roulette players would contribute disproportionately to global welfare." What are the implications of this stunning new analysis of the banking sector’s contribution to GDP?
At critical times in history, business sectors go through radical shifts that are driven by economic, political, and consumer forces. These shifts often bring revolutionary ideas that change things for the better. Shift happens. Shift is good—and for many in health care, shift is about to hit the fan.
The world’s largest corporation and the world’s most populous country are each fulfilling vital needs for the other: as China is providing Walmart with commercial growth, Walmart is helping China to extend Beijing’s regulatory writ. Together, they are engaging in a bold experiment in consumer behavior modification, market economics, and environmental stewardship. One thing is clear: how Walmart and China interact with each other over the next decade will be critical to the fate of the planet’s environment.